Indiabulls Real Estate Ltd has signed a definitive agreement with private equity firm Blackstone Group to divest 50 per cent stake in its prime commercial properties in Mumbai for Rs 4,750 crore.
The company will divest 50 per cent stake in Indiabulls Properties Pvt Ltd and Indiabulls Real Estate Company Pvt Ltd to Blackstone group at an aggregate enterprise value of approximately $ 1,461.5 million, or Rs 9,500 crore. The two subsidiaries hold premium commercial office assets, Indiabulls Finance Centre and One Indiabulls Centre, in central Mumbai.
According to Indiabulls, substantial part of sale proceeds would be utilised towards repayment of existing debts of the company and its subsidiaries, and for achieving sustainable long-term growth and for further strengthening of their on-going businesses. “Subject to satisfaction of customary closing conditions, the transaction is expected to be concluded during this financial year. Post conclusion of transaction, the company will cease its sole control over IPPL and IRECPL,” it said in a stock exchange filing.
Indiabulls in April last year had announced plans to restructure its business by creating a separate venture for commercial and leasing operations as part of efforts to focus on each segment. It planned to hive off commercial and leasing business into a separate entity Indiabulls Commercial Assets Ltd. The company had recently said it plans to sell its housing and commercial assets in Chennai as part of strategy to exit non-core market and restructure its business.
US-based Blackstone directly and along with its joint venture partner Embassy group currently holds huge commercial assets with over 56 million square feet across major cities. The group is planning to launch the country’s first real estate investment trust to monetise commercial assets. Unlike housing sector, the commercial real estate is doing fairly well and attracting huge investment from global investors like Blackstone and Singapore’s sovereign wealth fund GIC. Blackstone and GIC have been aggressively investing in commercial real estate. In one of the largest real estate deals in the country in 2017, GIC bought a stake in DLF’s rental arm for Rs 8,900 crore.